With most mortgages, your payment is the same every month. But what if your paycheck isn’t so regular? Would you like to be able to vary your mortgage payment depending on your cash flow? An option ARM — also called a flex-ARM or pick-a-payment loan — allows you to do just that.
How does it work?
An option ARM is an adjustable-rate mortgage with a twist. You don’t pay a set amount each month. Instead, the lender sends a monthly statement with up to four payment options. You simply choose the amount you want to pay that month and then submit your payment.
The options vary, but here’s the most common menu:
Minimum payment: This is calculated using an “initial” interest rate that can start as low as 1.25 percent. Because this payment is so low, it’s useful for months when you don’t have much cash on hand, perhaps because you are waiting for a commission or bonus check. But any unpaid interest gets deferred, or added to the principal of the loan, so your principal grows.
Interest only: You pay all the interest due, but none of the principal. This doesn’t reduce your mortgage balance, but it allows you to avoid deferring interest.
30-year amortized: This matches the monthly payment of a mortgage amortized over 30 years at your current interest rate. It includes both principal and interest.
15-year amortized: The same as above, but amortized over 15 years. This is the highest monthly payment. Choosing it allows you to reduce your principal faster than any other option.
The fine print
The biggest caveat with option ARMs is that those enticing initial rates are short-lived. The low minimum payments that make these mortgages so attractive can increase dramatically. In addition, every five years, the loan is recast — that is, a new amortization schedule is drawn up to ensure that the remaining balance will be paid off by the end of the loan’s term. When that happens, the minimum payment can be pushed even higher.
What’s more, if you defer too much interest, you can reach what’s called negative amortization. If your balance grows to 10 percent to 25 percent (depending on state law) greater than the original principal, your loan is automatically recast and you have to start paying the fully amortized rate, which will increase your monthly payments.
Another potential downside of option ARMs is that they’re more complicated than most other mortgages. Home buyers may be seduced without fully understanding how much the minimum payments will increase over the long-term. When the monthly amounts go up, these people can experience payment shock.
To learn more about flexible payment mortgages, visit http://www.lendingtree.com/cec/yourhome/yourmortgage/open-arms.asp
Student loans consolidation is a concept which is designed to help students repay their multiple debts they have taken during studies. Most students land into deep debt and have problem managing various debts as well as face financial difficulties in making the monthly payments. The solution of these problems is student debt consolidation, here all your outstanding debts are merged into one loan with just one payment to make every month. This new loan is offered at a lower and fixed rate of interest, lower monthly payments, various payment options and longer tenures.
Why Consolidate
This type of consolidation offers various benefits. The rate of interest is lower than all your consolidation and thus you pay lower monthly payments. The interest rates are locked, therefore it is shielded from the inflation rates. You get a flexible repayment options and no fees, charges or penalties. Also there are no credit checks and co signers required.
Your monthly payments could be lowered by around 54%. You typically have 10 years to repay, but in student loans consolidation the tenure can be extended to up to 30 years.
You will have to be eligible to get the student federal loan consolidation. Some criteria to be fulfilled are, you must be in the six month grace period after completing studies, after which the repayments start. The other case is that you have started paying the installments already. Then, your total loans outstanding must be at least $7500. You have taken loan from different lenders and you can consolidate your loan just once.
Which Loans Are Eligible
There are also certain options that can be consolidated under the student loans consolidation programs:
Federal Subsidized And Unsubsidized Stafford Loans
Federal Consolidation Loans
Guaranteed Student loans
FISL
Federal Perkin Loans
Auxiliary Loans To Assist Students
NDSL
Health Education Assistance Loans
Loans For Disadvantaged Students
NSL
You can get them from any bank or financial institution which participates in the Federal Family Education Loan program. The student debt consolidation loan term and conditions should be verified with your lender. The interest rate offered is generally the same by all the lenders but some lenders also offer future discounts if your repayment record is good and also discounts if your monthly payment is to be debited directly from your bank account.
The whole process of student federal loan consolidation usually takes 30 to 45 days. It is the best way to manage your financial responsibilities after college. Your multiple debts will be turned into one loan with just one payment to make every month. The student loans consolidation will be convenient for you and because of the lower interest rates, it will be financially beneficial too.
Unsecured business lines of credit are the most difficult form of credit to be obtained from a bank or financial institutions. Applicants of these loans have to meet many criteria such as having been in business for a minimum of one year, having a credit score of more than 680, and having a good credit history and profile. Nearly 90% of all such loan applications for unsecured lines of credit are rejected. However there are alternatives to unsecured business lines of credit. Short Term Bank Loans Most of these short-term loans do not require collateral and are unsecured. Their duration may vary from 90 to 120 days or 1 to 3 years. Banks are very specific about repayment plans and will grant loans only after they have scrutinized the cash flow history, payment record, credit score, and profile. Although the rate of interest is fixed, you will pay less since the interest is repaid quickly.
Secured Business Line of Credit A secured business line of credit is a far better alternative, as the interest rate is considerably lower. Hard goods such as equipment, real estate, stocks, bonds, other personal assets, personal guarantees and assets owned by the business are given as collateral. Up to 10 times more credit can be obtained than in the case of an unsecured line of credit owing to the collateral that has been pledged. Most small businesses prefer the higher credit limit and flexibility that a secured line of credit offers.
Equipment Sale Lease Back If the business owns any equipment worth more than $10,000, it can be sold to the creditors and leased back. This kind of loan gives the business the amount of cash it needs and they make a token payment as lease for the equipment.
Merchant Account Cash Advance This is another alternative to unsecured business lines of credit. If credit cards such as VISA/ MasterCard are used by the business for at least 6 months, they can get a cash advance based on their monthly volume of charges. The only perquisite is no history of bankruptcy in the last 3 years.
Home Equity Loan The business owner may use their home as collateral and secure a home equity loan. In this case the business owner takes the risk of losing the home as well as the business if the loan is not repaid on time.
Long-Term Bank Loans These loans last for 3 to 7 years and repayment is made on an installment basis. The interest rate is fixed and lower than that of a short-term loan.
Industry Specific Loans Another alternative to unsecured business lines of credit, this type of loan is specific to the industry in which the company operates. An example is a pollution control loan for businesses that design, build, install, or service pollution control facilities.
Make an Informed Decision Once you’ve determined the amount of cash need, examine all the options and study what kind of a loan best suits your needs, knowing exactly how to make the best use of the loan. Have a repayment plan ready and work towards a debt-free life with hard work and determination. A high interest loan, such as, an unsecured business line of credit may be more costly than you bargained for. Several companies offer excellent software packages to help manage the financial aspect of your business, making the task of running the business and maintaining records a fairly easy job.
At times you want a loan only for a short repaying term because you require smaller amount. In such a situation there is no need for you to pledge any of your valuable assets in taking loan. You have the option of short term loans UK that is meant for a few years of duration without your property. You can borrow smaller amount under these loans for renovating home, buying a car, paying for wedding or holiday expenses or for debt consolidation.
A short term loan UK is known by many names but they usually mean the same thing –the way to overcome short term financial emergencies. There are certain requirements for getting this loan approved which are –
· A regular employment with regular income of at least 6 month old
· A valid bank account
· Minimum 18 years age of the borrower
Even if you have bad, poor or no credit, you can still apply for this loan. This is because short term loan require no credit check. These loans offer same terms to all borrowers irrespective of their credit status.Getting short term loans uk is fast and easy. They have a simple application process for these loans. All you have to do is fill in a simple online no obligation form. Fill in your simple details and submit the form and the lenders will start working on your loan. Once approved, the money will be electronically transferred into your bank account within the same day.
You can get up to £500 as short term loan. However, depending on your circumstances you can get much larger amount like £1000. Repayment for short term loans UK, as the name suggests is short ranging, from 10-14 days. Many lenders have the provision of extending loan term for the convenience of our borrower
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